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1995 Supreme(HP) 40
High Court Of Himachal Pradesh
S.N.PHUKAN,BHAWANI SINGH
DROMATI DEVI - Appellant
Versus
SOHAN SINGH - Respondent
F.A.O. (WCA) No. 166 of 1992
Decided On : 06/26/1995
For the appellant(s) :None. For the respondent(s):L. C. Kapoor, Advocate for respondent No. 2.
The employer is duty-bound to pay compensation, interest, and penalty in case of delayed payment upon receiving information about the accident. The insurance company is not liable to pay penalty and interest under section 4-A of the Act.
Headnote:
Workmens Compensation Act - Interest and Penalty - The court held that the employer is duty-bound to pay compensation, interest, and penalty in case of delayed payment upon receiving information about the accident. The insurance company is not liable to pay penalty and interest under section 4-A of the Act. Negligence on the part of the employer in not paying compensation within one month from the due date was established. The employer was directed to pay the interest and penalty, not the insurance company.
Fact of the Case:
One Shri Charanji Lal, a conductor, died in a truck accident. A claim under the Workmens Compensation Act was filed, and the Commissioner awarded a sum of Rs. 81,496 as compensation, with further direction for interest at the rate of 20% in case of delayed payment. The appeal was filed only for interest and penalty under section 4-A of the Act.
Finding of the Court:
The court found negligence on the part of the employer in not paying compensation within one month from the due date. It held that the employer is duty-bound to pay compensation, interest, and penalty in case of delayed payment upon receiving information about the accident. The insurance company is not liable to pay penalty and interest under section 4-A of the Act. The employer was directed to pay the interest and penalty, not the insurance company. The appeal was allowed, and the employer was directed to pay the interest and penalty.
Issues: The issues revolved around the liability for interest and penalty under section 4-A of the Workmens Compensation Act, 1923. The main issue was whether the insurance company or the employer was responsible for paying the interest and penalty for delayed compensation.
Ratio Decidendi: The court established that the employer is duty-bound to pay compensation, interest, and penalty in case of delayed payment upon receiving information about the accident. It also held that the insurance company is not liable to pay penalty and interest under section 4-A of the Act. Negligence on the part of the employer in not paying compensation within one month from the due date was established.
Final Decision: The appeal was allowed, and the employer was directed to pay the interest and penalty on the compensation amount, not the insurance company. The parties were directed to bear their own costs.
S N. Phukan, C, J —This appeal is directed against the Award of the Commissioner, under Workmens Compensation (SDM), Mandi dated 29-10-1991 in File No. 11 of 1991.
2. Admittedly, one Shri Charanji Lal, who was about 18 years, was working as a conductor under respondent No. 1 in his Truck No. HID- 1961. The truck met with an accident on 19-M990 and a claim under Workmens Compensation Act, 1923 was filed before the Commissioner. By the impugned award. Commissioner awarded, taking into consideration the income and age of the deceased, a sum of Rs. 81,496 with further direction that in case of failure to deposit the amount within one month, interest at the rate of 20% on the above amount shall be payable. The Insurance Company, namely, respondent No. 2 was saddled with the compensation as well as the interest.
3. The present appeal has been filed only for interest and penalty, as provided under section 4-A of the Workmens Compensation Act, 1923.
4. According to the learned Counsel for the Insurance Company, the Insurance Company cannot be fastened for the payment of penalty as well as interest. The said section 4-A is reproduced below : "4-A, Compensation to be paid when due and penalty for default.—(1) Compensation under section 4 shall be paid as soon as it falls due. (2) In cases where the employer does not accept the liability for compensation to the extent claimed, he shall be bound to make provisional payment based on the extent of liability which he accepts, and such payment shall be deposited with the Commissioner or made to the workman, as the case may be, without prejudice to the right of the workman to make any further claim. (3) Where any employer is in default in paying the compensation due under this Act within one month from the date it fell due, the Commissioner may direct that, in addition to the amount of the arrears, simple interest at the rate of 6% per annum on the amount due together with, if in the opinion of the Commissioner there is no justification for the delay, a further sum not exceeding fifty per cent of such amount, be recovered from the employer by way of penalty."
5. From the original record, we find that In the reply, filed on behalf of respondent No J, namely, the owner of the track, in para 8, it has been clearly admitted that the said respondent had notice of the accident and about the death of the deceased workman.
6. Reading section 4-A, we are of the view that it is the duty of the employer to pay the compensation including interest and penalty in case of the delayed payment, on receipt of the information about the accident. In the case in hand, admittedly, the owner, namely, respondent No. 1, had full knowledge of the accident and it was for his default that payment was not paid in time. Had he paid the amount, possibly, he could have claim ed that he should be indemnified by the Insurance Company, provided it is under the insurance policy. In the case in hand, inspite of the fact that the employer knew about the accident, he did not pay the compensation to the members of the deceaseds family in accordance with the provisions of the Act and rules framed thereunder. In this connection, our attention has been drawn by the learned Counsel for the Insurance Company to various decisions of different High Courts and we may refer to two decisions, namely, Jayantilal and Company v. Garasia Rajvirha Udesinh and others, 1992 ACJ 286, which is a decision of the Gujarat High Court. The another decision, to which our attention has been drawn is of Karnataka High Court in Oriental Insurance Company Limited v. Raju, 1994 ACJ 191. In both the above decisions, the High Court held that the Insurance Company is not liable to pay penalty and interest under section 4-A of the Act. We are in respectful agreement to the ratio laid down in the above two decisions, in view of the fact that no other decision of any other High Court taking a different view, has been brought to our notice.
7. In the result, we hold
